EGBs-GILTS CASH CLOSE: Price Swings Both Ways As Markets Digest BoE

Gilts swung in both directions following the BoE's decision to slow asset purchases while downplaying it as an active policy shift. After initially dropping sharply, Gilt yields rose to session highs, before eventually moving lower again later in the afternoon as equities bounced.

• EGBs saw a bit of selling interest in the afternoon (possibly ahead of Friday's U.S. payrolls data), but again, recovered later in the session.
• Notably BTP yields / spreads rose, with both Bloomberg and Reuters separately citing speculation from market sources over a potential new 30-Yr bond syndication (no confirmation as yet).
• German Mar factory orders beat expectations.
• Supply was from France (OATs, EUR10.4bn) and Spain (Bono/Oblis/ObliEi, EUR5.4bn).

Closing yields/10-Yr Spreads to Bunds:

• Germany: The 2-Yr yield is up 0.4bps at -0.691%, 5-Yr is up 0.4bps at -0.599%, 10-Yr is up 0.3bps at -0.225%, and 30-Yr is up 1bps at 0.341%.
• UK: The 2-Yr yield is down 1.5bps at 0.039%, 5-Yr is down 2.5bps at 0.334%, 10-Yr is down 2.7bps at 0.792%, and 30-Yr is down 0.8bps at 1.318%.
• Italian BTP spread up 1.6bps at 114.2bps/ Spanish spread up 0.3bps at 68.2bps